Crises continue at Wal-Mart, Penn State and JPMorgan


The surest gauge of how well a manager handled a crisis is whether it continues or not.

A trial at a future date surely reignites a crisis, like Penn State’s. Though according to a writer, Mike Poorman, who carefully follows happenings in Happy Valley, life is getting back to normal. Yet the Jerry Sandusky child abuse trial just opened yesterday in Bellefonte, PA. Much more to come, no doubt.

But recent ones plaguing Wal-Mart and JPMorgan Chase also continue to simmer on high. Wal-Mart shareholders voted by Friday and made their objection to the Mexican bribery scandal very clear. And reports yesterday and today suggest that JPMorgan executives should have known and may have known about excessive risk in the bank’s investments.

We’ve discussed these in recent blogs as examples, in Penn State’s case, of a crisis mangled from the start. If that great university is to survive the Sandusky trial with its reputation intact, some officials better have backing for their claims of ignorance and innocence.

JPMorgan followed a primary rule of crisis management when its CEO was the one who announced the bad news, $2 billion in trading losses. Smart. But as more time passed and more background revelations emerged, it appeared his pre-emptive strike was the tip of a pretty scuzzy iceberg.

Wal-Mart, which a lot of people love to hate as a Mom & Pop store carnivore, is so big it’s pretty hard to stick the folks at the top with a scandal at their Mexican division. But that’s why they have the stock options and the big salaries. They’re responsible. From the New York Times’ account, shareholders voted a whopping 12 percent against the current CEO.

The founding Walton family controls almost half of the shares in the company, and the stock ownership of executives and board members pushes the inside control of shares to slightly over 50 percent. Still, the “no” votes meant that about one-third of outside investors — those who are not Waltons, directors or executives — did not support the company’s chairman, chief executive and two board members.

Wal-Mart has apparently not sufficiently addressed this crisis to ease it in the minds of many shareholders. Until the company and CEO Mike Duke explain fully what the company did in Mexico, he won’t end the crisis. This is particularly true as Wal-Mart tries to extend its domestic model overseas, where sales growth is likely more promising.

Three crises at significant American institutions — one of its largest, most prestigious universities; one of its largest companies and the biggest retailer; and the nation’s largest bank — without significant improvement over months of trying to end or at least lessen those crises.

Needless.

The content of this blog is about crisis management and mismanagement in a digital age. It originates with Steve Bell, who spent 30 years as a journalist for the Associated Press and in four top editor positions at The Buffalo News. He is now Partner/Director of Public Affairs at Eric Mower + Associates, one of the nation’s largest independent advertising, integrated marketing and public relations agencies, with seven offices in the Northeast and Southeast. Learn more about EMA at www.mower.com. Steve’s blog is based on his own opinions and does not represent the views or positions of Eric Mower + Associates.

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About steveoncrisis

The content is about crisis management and mismanagement in a digital age. It comes from Steve Bell, who spent 30 years as a journalist for the Associated Press and as managing editor and editorial page editor at The Buffalo News. He is now Partner/Director of Public Affairs at Eric Mower and Associates, one of the nation's largest independent advertising, integrated marketing and public relations agency with six offices in the Northeast and Southeast.
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